30 YEARS AGO – September 29 was the D-Day: the military government led by Gen. Ibrahim Badamasi Babangida launched the Structural Adjustment Programme (SAP) that was to cure all of the nation’s economic problems.
Babangida (IBB) had overthrown Major General Muhammadu Buhari a year earlier, accusing him of inaction in the face of mounting economic challenges.
The effects of SAP were instantaneous: The dollar exchanged with N10, up from N3. Prices of goods, which started increasing five years earlier when the civilian government of Shehu Shagari launched the “Austerity Measures” programme, hit the roof. From then, the price of petrol rose from 20kobo per litre to 25kobo and then 70kobo in 1987. It shot up to N5 in 1992.
Afrobeat musician Fela Anikulapo-Kuti said SAP stood for “stomach adjustment programme”. And he was right.
Babangida embarked on SAP after “rejecting” the IMF loan which he had asked Nigerians to debate. Nigerians overwhelmingly said no. But IBB took the loan conditionalities through the backdoor: SAP.
Here is an extract from a World Bank document published in 1994: “Under the Structural Adjustment Program (SAP) introduced in 1986, Nigeria reformed its foreign exchange system, trade policies, and business and agricultural regulations. This success notwithstanding, per capita income is still only US$320 and consumption and income are little higher (in real per capita terms) than they were in the early 1970s before the oil boom. Because over 90 per cent of Nigeria’s export earnings are from oil, growth in agriculture and manufacturing could offset little of the large drop in purchasing power that resulted from the collapse of oil export revenues that had prompted the adoption of the SAP. For Nigeria to break its vicious circle of excessive public spending, inflation, and exchange rate depreciation, and to reach the virtuous circle achieved by these other developing countries, it will need to adopt a package of stabilization and structural measures that ensures the efficient use of resources (by both the public and private sectors) and the provision of basic social services. This path offers Nigeria the best prospects for sustaining economic growth and poverty reduction.”
Babangida promised that SAP would be with Nigeria until the end of the world. It has been.